Question

if demand for a product goes up, and supply is unchanged, what happens to the price and quantity? (you may use the chart below to help you):

demand	supply	price	quantity
↓	unchanged	↓	↓
unchanged	↑	↓	↑
unchanged	↓	↑	↓

Explanation:

Step1: Recall Demand - Supply Theory

In the basic supply - demand model, when supply is constant and demand increases, the demand curve shifts to the right. At the original equilibrium price, there is a shortage (quantity demanded > quantity supplied).

Step2: Analyze Price and Quantity Changes

To eliminate the shortage, producers will increase the price. As the price increases, the quantity supplied (along the unchanged supply curve) will increase, and the quantity demanded (along the new demand curve) will decrease until a new equilibrium is reached. At the new equilibrium, compared to the original equilibrium, the price is higher and the quantity traded (quantity) is also higher. From the given chart, when demand goes up (green up - arrow) and supply is unchanged, the price has a green up - arrow (increases) and quantity has a green up - arrow (increases).

Answer:

When demand for a product goes up and supply is unchanged, the price increases and the quantity (of the product traded) increases.